Colombo still undecided about when to repay

Sri Lanka is unable to repay foreign loans, including Bangladesh's $200 million credit, right away as the island nation is still struggling with its ailing economy, according to a senior Lankan minister.
"Still, it's not decided when we're going to repay the loans. Of course, all have to be agreed… It's still not finalised how many years they will give us the grace period," said minister for environment Naseer Ahamed.
During a visit to Sri Lanka last month, this correspondent took an interview of Mr Naseer in Colombo.
According to the Lankan finance ministry, the country's current external debt
from different bilateral and multilateral lenders is $36.09 billion, including Bangladesh's $200 million.
In May 2021, Bangladesh lent the money to the island nation to help its fragile economy rally.
Following the failure in the repayment, Bangladesh has already extended the repayment period.
Mr Ahamed said: "We're dealing with the lenders about their loan repayments. I exactly don't know how much time will be required (to repay the loans) and how many years those countries will allow us."
"Bangladesh is also in this process like China. Most of the countries (lenders) are looking after Sri Lanka somehow and supporting to overcome the challenges."
The minister said they were dealing with local loan components too, although it has definitely had a political issue, but the government is determined to go ahead without hurting people.
"The President has taken a policy to come back from the crisis. One of the breakthroughs is that we've signed a loan deal with the IMF (International Monetary Fund). From that time onwards, things have changed a lot."
"Now, our reserves have increased quite a lot and foreign remittances also. Foreign tourists are coming to Sri Lanka. Export is also back to a level, although unlike the previous normal situation. But improvement is there," he told the FE.
"Of course, we still have a lot of pains. Fortunately, our people are bearing the burden and they continue to bear it. And with the consistency policy of our President, I'm sure that we'll be able to return into a normal situation within a year or two."
About the IMF's reform proposals and its impact on the people, the Lankan minister said: "Obviously, any IMF condition is going to be detrimental to any ruling government. That is the nature of the IMF conditions and particularly for the country like ours."
The President is very much confident that this has to be done and make people understand. And the people have accepted his plan, commented the minister.
When asked about his government's economic recovery plan, Mr Ahamed said: "In my opinion, the country like Sri Lanka can bounce back very quickly as it's a small economy. At the same time, it has enough resources to come out of this mess."
"That's why, massive reforms are taking place… A lot of FDI (foreign direct investment) inflow is expected, and also the export to go up."
"The President's target is to increase $3.0 billion from FDI and an additional $3.0 billion from exports by next year. If the President's vision in all the sectors is implemented, the target will be fulfilled."
The environment minister has laid emphasis on strengthening the SAARC and trade cooperation with South Asian countries.
He was also keen to improve bilateral relations with Bangladesh in different sectors, including tourism, aviation, mining and health service.
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